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Rumor-mongering about such mythical products is a regular spectator sport for many Apple
watchers.

But after the company said it could post a year-over-year decline in revenue this fiscal year
for the first time since 2002, such conjecturing is turning into high-octane pressure for the
company to do something, anything, to reboot growth.

“Apple needs to have more products it can sell to its high-priced customer base,” said Colin
Gillis, an analyst with BGC Partners. “You should have a degree of urgency here.”

Concerns about the weak outlook for iPhone growth sent Apple’s stock plunging last week after
the company reported disappointing fiscal first-quarter earnings. Apple sold 51 million iPhones
over the holiday quarter, a record, but fewer than the 55 million analysts had predicted.

More ominous for many investors, though, was a lower-than-expected projection for revenue in the
current quarter. Though Apple said there were technical reasons behind its guidance, such as
changes in inventory and accounting for revenue, analysts still had assumed that a deal to sell the
iPhone through China Mobile, the world’s largest carrier, would give Apple a boost.

Instead, analysts wondered whether the disappointing outlook was part of a broader signal that
the smartphone market, especially the high end that Apple dominates, is becoming saturated. Indeed,
rival Samsung also recently reported disappointing sales, and Verizon Wireless also said smartphone
activations were slowing.

“Apple is fighting an uphill battle in this market,” said Brian White, an analyst with Cantor
Fitzgerald. “The smartphone market overall is having problems.”

Considering that Apple still makes most of its profit and revenue from the iPhone, the potential
for such a slowdown is troubling. As a result, analysts increasingly believe that a dramatic
overhaul of existing products, or entering a new product category, is essential if Apple wants to
keep growing.

Apple remains mum as always on the subject of new products. On a conference call last Monday,
analysts asked only timidly about the topic, knowing that it was futile to expect a comment from
Apple management.

“I would just say innovation is deeply embedded in everybody here, and there’s still so much of
the world that is full of very complex products,” Apple CEO Tim Cook said in response to one such
query. “We have zero issue coming up with things we want to do that we think we can disrupt in a
major way. The challenge is always to focus and to do the very few that deserve all of our energy.”&
amp; amp; amp; lt; /p>

But those remarks did nothing to dampen speculation. One option for Apple may be to adjust the
size of its iPhones.

Rumors have Apple working on an iPhone with screens as big as 4.7 inches, and possibly an
iPhone/iPad hybrid (awkwardly dubbed a “phablet”) with a 5.7-inch screen. Either gadget would be
bigger than the current 4-inch screen on the iPhone 5S and 5C, and a nod toward the growing
popularity of larger smartphones around the world.

Such gadgets may make their debut as early as late spring, according to some reports. Of course,
runaway rumors last year that Apple was working on a cheap iPhone turned out to be wrong.

Talk of an iWatch has cooled after running hot much of last year, though many observers believe
it’s natural for Apple to get into the wearables business.

But after the earnings report last week, signals of an update to the Apple TV digital receiver
seemed to get louder when the company refreshed its online store to include the gadget as a
stand-alone category for the first time. That places it alongside the iPhone, iPad, Macs and the
iPod in prominence.

Although the prospect of Apple building a full-fledged TV still seems far away, there is chatter
that Apple may allow developers to start writing applications and games for the $99 set-top box,
which plugs into a television and enables users to access iTunes content. In the past year, Apple
has dramatically expanded the number of partners offering content through Apple TV.

Also gaining traction is the belief that Apple is working on some kind of digital wallet or
payment system. This month, the U.S. Patent and Trademark Office published a patent by Apple for a
system of making secure payments through mobile devices.

Part of the thinking is that the new fingerprint sensor that made its debut on the iPhone 5S
last year, known as Touch ID, will be a gateway for letting users make fast, secure purchases just
by touching their iPhone.

“The mobile-payments area in general is one that we have been intrigued with and that was one of
the thoughts behind Touch ID,” Cook said on the conference call. “You can tell by looking at the
demographics of our customers and the amount of commerce that goes through iOS devices versus the
competition that it’s a big opportunity on the platform.”

In the meantime, the falling stock price inspired activist investor Carl Icahn to buy an
additional $500 million in Apple stock. Icahn, who previously said he owned $3.6 billion in Apple
shares, has been pressing the company to use more of its cash to buy back shares to give the stock
price a boost.

Apple has said it’s reviewing such options, but also needs enough cash on hand to remain
flexible and invest in new products and acquisitions. Icahn said the company has plenty of money to
do both. Apple’s cash on hand grew to $158.8 billion in the most recent quarter, up from $146.8
billion the previous quarter.